Q3 2022 H World Group Ltd Earnings Call
Yeah.
Good day, and thank you for standing by and welcome to the H World Third quarter 2022 earnings Conference call.
At this time.
All participants are in a listen only mode. After the speaker's presentation, there will be question and answer session.
To answer questions. During the session you will need to press star one on your telephone you didn't hear an automated message of Pfizer in your hand, it's raised.
Please be advised that today's conference is being recorded.
Now I'd like to hand, the conference over to Mr. Jason Chen Investor Relations director. Thank you. Please go ahead Sir.
Yeah.
Thank you.
And good evening, everyone. Thanks for joining us today welcome to towards group.
Third quarter Tucson in 'twenty two earnings conference call.
Joining us today.
Mr Qi.
Our CEO Mr. Jean Cui.
President Mr. Joseph <unk>, our CFO , John way, our deputy CFO .
And our CEO of international business Misquotes equal.
Following their prepared remarks management will be available to answer your questions before.
Before we continue please note that the discussion today will include forward looking statements made under the Safe Harbor provisions of the United States Private Securities Litigation Reform Act called 1995.
Forward looking statements involve inherent risks and uncertainties.
Such our results may be materially different from the views expressed today.
A number of potential risks and uncertainties outlined in our public filings with the FTC.
It's what group does not undertake any obligations to update any forward looking statement, except as required by applicable laws.
Today, we will also mention adjusted financial measures during the discussion of our performance free conciliation of those measures to comparable GAAP information can be found in our earnings release that was distributed yesterday.
As a reminder, this.
Conference call is being recorded the webcast of this conference as well as supplementary slide.
Available at IR at <unk>.
<unk> Dot com.
With that now I will turn the call over to Mr. Qi Mr. Zhu Please.
Good morning, and good evening everyone.
For Julian.
We are happy to report that our China.
It needs to get a pop you'd sort of quarter.
Covered it to 90%.
19 label sense too and the leisure.
Leisure travel demand.
We're asking them to cover that.
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These recoveries are closely associated.
Legacy issue.
Colby.
It's sort of a quarter.
However.
The increase of Colgate crises.
I'd say its more uncertainties and a negative impact on work in this recovery.
The consequence of Titan.
Control measures.
In the third quarter, we reported.
With caveat to organizational restructuring.
Country.
And I believe that six rig even though in the quarters.
So the focus on economic and mid scale segments.
Yes of course.
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Our organizations.
Organizations.
Okay.
Great.
Aligned at this juncture for me this is Gil.
On the luxury brands in China.
Provide them more efficient.
It had been.
Over site.
Our long term sustainable quality growth we have.
These are emphasizing.
Improvement of products and our service quality.
We accelerated in there because it thrown low quality some of the brands.
Secondly segment.
Oliver we've continuously upgrade to our mature brands.
That's how the hunting and it's easily to him.
That's a new.
They took it on the call today.
Looking back in the last three years.
He has brought a tremendous challenges to Chinese lodging market.
However, branded a chance hotel hotels.
Showing high resilience.
Depending on our hotels.
In fact over the last three years Chan hotels, while continuously.
And Jenny gaining more market shares.
Leading the recovery.
Right.
We believe there's a shift from independent hotels to Brendan.
Peter.
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Montana, I know I'll have Brendan hotel, a chance to see the.
Consolidated market.
We were confident in that.
For these trends.
Our strong brand and a quality product.
With recovery, mainly international travel market.
Our Deutsche Hospitality business achieved another good quarter of business either.
It does.
You said a quarter.
202, compared to 2019 and this quarter is.
Cost of management.
The elimination of op units are in place.
Good to position to continuously improve our pump.
Portable calculate.
Due to the center logic sporadic it could be.
In many provinces and cities in China, we see.
Printed copies measures continue to be a caveat.
I wanted to couple of is the short term turbulences and preserve.
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Caesars in live operations.
Project on Capex spending.
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Look.
I look at so yeah, it's cleaner, it's planned that way.
We all are is the walk of closing it with our franchisees and partners to help them per visit it challenges.
During this special period.
Caesars Jonathan.
Foundation on appeal with it because it's.
The resilience of our company.
It is our turn the call to gently.
Couple of hours.
I can tell.
And we'll Miss you.
Hi, gentlemen, thank you for the year was down here.
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Thank you Chi.
Firstly, please turn to page three let.
Let me briefly review our key achievements in the third quarter.
<unk> network expansion with a focus on sustainable quality growth number.
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Please turn to page four.
Although the continuous researches of Colgate.
Still achieved a relative good revpar recovery in the third quarter in China.
The revpar recover to a 90% of two sides of the 2019 level.
This was mainly driven by pent up leisure demand in July and August as well as gradual recovery of business traveling in the late September .
However, we saw most parotic resurgence of Colgate since October with strict restriction was in post again.
Our revpar in October only recover.
34% of 2019 level.
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Please turn to page five our hotel network further expanded and Jimmy we also continuously increased in the quarter.
At the end of the third quarter, our number of hotel rooms grew by 10% year over year to 797000 with China Hotel rooms grew 11% year over year to 772000.
Our total <unk> in the third quarter increased by 24% year over year to RMB, 15, 2 billion, where China GMB grew 22% year over year to RMB 13 5 billion.
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Our lower tier cities penetration strategy continues progressing please turn to page six as.
As of the end of the third quarter hotels from lower tier cities contribution further increased to $2, 41% and 59% of total hotels in operation and pipelines, respectively. Moreover, as you may notice that our number of new signings during the quarter was still lower than a year ago.
It still shows that our franchisees confidence level has not yet fully returned due to a resurgence of COVID-19.
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Please turn to page seven looking back the last few years post Covid based on China lodging industry data, we have observed that Thats branded China Hotel, we're showing further resilience independent hotels.
A lot of independent hotels with weaker anti risk capabilities, we're actually closed with roughly 22% and 13% of independent hotel actually closed in 2020, 'twenty and 2021, respectively.
In the same period, our hotel network or still expanding.
We also showed our closure ratio in the figures our closure ratio was 10% and 7% in 2020, and the 2021, which were much lower compared to independent hotels.
China lodging industry churn ratio continuously improve from only 19% in 2018% to 35% in 2021. Therefore, we think the trend of the further industry consolidation post the Colgate remains unchanged. Moreover, as Mr. <unk> mentioned in the beginning more than more independent.
<unk> started to preferred joining branded hotels, which could further bring more consolidation opportunities to us in the long run.
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Please turn to page eight.
We still need to insist on our sustainable quality growth strategy for our long term business development. For example, our hunting brands, we continuously upgrade our hunting products over the past few years, we found out that after upgrading to newer version the revpar for the improved by roughly 20%.
At older version in average at the end of the third quarter hunting to seven purchase and both are content to roughly 59% of total hunting hotels in operation improved by 25 percentage points in 2020.
Compared to 2020 at the same time Huntington's customer satisfaction score also improved along with product upgrading from four five in 2020 improved to $4 67 in the third quarter.
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Please turn to page nine not only hunting brand, but also all our brands in our portfolio, we keep to improve the overall hotel qualities as you can see low quality softer brand economics hotels and hunting 1.0 version contribution will gradually declining over the years.
As of the third quarter it only accounts for roughly 14, 3% of our total hotels in operation.
Hotel product quality improvements also led continuously customer satisfaction score improvements.
It improved from four five in 2022 468.
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Please turn to page 10.
Our Orange brand hotel achieved its 500 hotel milestone during the quarter, reaching 505 hotels by the end of the quarter.
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These documents is also steadily progressing please turn to page 11, we introduced a new version of intra city brands during the quarter and our CD will be mainly located in traffic cop or commercial centers location at brings in Germans simplicity and programmatic two hotels in China to provide.
High efficient service to our customers our two newly opened intercity hotels are located in sinton in Wuhan.
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For our upscale segment, we saw our Bluestone House brand is quickly tapping into the leisure traveling market.
Please turn to page 12, since our acquisition, we successfully transformed its business model from previously 90% of hotels are under lease model through roughly 60 70, 67% of total hotels.
Asset light franchise based model.
Moreover, the brand also extends from a single blooms on house brands to Blossom lifestyle community and bluestone collections, achieving multi brands.
Local model.
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Please turn to page 13, we further upgraded our Edgewood App and have successfully launched its 4.0 version. This upgrade focus of our two service and at the full digitalization guest experiences and are further strengthening the interactive service experiences with cast at different touch.
Points on the basis of consistent highly efficient services.
For example, our intelligence laundry function it allows customers to make reservation remotely and a charter long during process in the state us in real time, such function could strengthen the perception of members per religious and it benefits in a.
First nine months of 2022, there were totally 99 million customers.
<unk> experience to our online service compared to only 27 million customers a year ago.
Usage of online service also improved to $2, 71% in October from 21% last year.
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Above all our key business development update for the quarter was that our now turn the call to our CEO of international business mix vertical and discuss our business development during the quarter.
Hey, Jamie well.
Okay.
Hello, Yes. Please.
Okay. Thank you. Thank you deeply engaging.
My name is Jay.
In the.
The international business.
Sure.
Our international business.
I'm happy to report that we had continuous recovery in the third.
Good quarter.
Our blended revpar increased 202% compared to the same quarter in 2019 with its recovery trend continuing October as well.
Recoveries primarily abroad.
Which was increased by 17% compared to the same quarter in 2019.
If demand continues to be driven by transient leisure traveler.
And the pent up.
Yes.
In the third quarter, our teaming Blake I'll close with <unk>.
And can you to focus on cost management and margin improvement.
Result, we can report.
Third quarter EBITDA of 94 million.
A significant improvement compared to the loss.
$10 million in the third quarter. Thank you. Thank you one and the cheeseman <unk>, 230% increase compared to second quarter. Thank you <unk>.
This margin improvement was driven headquarter overhead reduction.
Efficiency improvement alongside with the rest of our ground.
I think.
We're carrying out several energy management initiatives, you know hotel.
With the increasing energy costs in Europe , especially in Germany.
Third quarter, we added 23% systems background hotel rooms.
The third quarter 2019, we launched a new website with all brand and a new rewards program to focus on loyalty development and the direct booking channel.
Rolled out several new digital project to improve technology deployment.
We're currently focusing on digital sleep to further improve efficiency about Buckhead hotel.
Technology deployment.
With this I'm handing over to Amit.
Well quoted.
Third quarter financial results.
Okay.
Thank you Jay good morning, or good evening to everyone.
Let's move on to our operational and financial review for the third quarter of 2022.
On slide 17, <unk> blended revpar for Q3 actually performed well owning 10% off from 2019, mainly dragged by the occupancy rate. The Adi 2022, Q3 was up by 3% on a year over year basis.
Revpar was up by 9%.
Turning to page 18 next Dth business recovery further accelerated in third quarter SG home mentioned.
Our next Cba's blended Revpar for Q3 grew by 57% to 76, you will compare with Q2 2020 plan Q3, 2021, and also grew by 2% compared with the 2019 level.
Occupancy improved by 17 percentage points compared with Q3 2021 by steel Knight 0.96 percentage points lower than 2019 level.
<unk> improved by 15% year over year to Europe .
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Which actually.
2019 level by 17% driven.
Driven by the pent up demand in Europe , and also price increase to against cost inflation.
Yeah.
Please see our financial results on slide 19.
Total revenue grew by 16% year over year to RMB four 1 billion in Q3, mainly driven by the seven 7% year over year revenue growth of legacy why two to RMB, three 2 billion and 68 year over year revenue growth of Lexi P. H to RMB 932 million.
Revenue.
Revenue was in line with our previous guidance.
Quadro revenue growth was mainly supported by the leisure demand in the summer holiday during July and August and the gradual recovery of the business traveling in late September as well as a low base from last year.
Breaking down the revenue in Q3 East and owned revenue grew 15% year on year to RMB, two 7 billion, excluding GH lease and on the revenue of Lexi Quadro grew by 0.5% year over year to RMB 1 million, because we shut down some.
Loss, making hotels during this quarter revenue from <unk> and franchised hotels declined by 16% to RMB, one 3 billion, mainly driven by 16% revenue growth of Lexi Quad, two and 22% revenue growth of <unk> C. D H.
16% year over year growth of revenue from <unk> and franchised hotels Lexi Quad two also included roughly.
120 million RMB impact from the management fee waiver provided to the franchisees during this quarter.
Due to the strong business recovery of legacy DH lease and owned hotels during this quarter at group level and monetized in franchise revenue contribution was flattish.
And in Q3 compared to last year, but China, only although considering the management fee waiver provided for all our franchisees are monetized in franchise revenue contribution in the third quarter further expanded to 40% compared to 38% in Q3 last year. Thanks to.
Our continuous network expansion with a life model.
Now, let's move to the post and profitability section on slide 20.
In Q3 2022, the reported operating income was RMB 500 million compared to only RMB 72 million last year, and RMB 8 million a quarter before.
The significant increase of the operating income year over year, mainly due to China business performance and the recovery of DH business.
Excluding D H legacy <unk> operating income in Q3 was RMB $449 million.
By 88% year over year, and improved significantly from RMB $21 million a pellicle.
The hotel operating cost for Q3 was RMB 3 billion increased by six 6% year over year.
Let's see what you it's recorded RMB, two 3 billion hotel operating costs almost flattish from last year. The increase was mainly from variable costs such as utility salary performance based bonuses for hotel G M and more GM recruited as our hotel network expansion.
And.
We offset the cost by roughly RMB 130 million rental reduction, which double the amount we achieved in Q2.
For legacy DH, we recorded RMB 744 million hotel operating cost, indicating a 18% year over year growth. The increase was mainly due to the increase of variable costs associated with business recovery, such as labor F N b variable rents and et cetera.
We have less rental reduction compared to the same quarter last year as business recovered.
Pre opening costs was RMB $25 million in Q3, mainly due to the limited service lease and owned hotels under construction during this quarter, including the flagship of inter city hotels. This number is expected to be small as we read the hurdle for the leased hotels and are very much focused on the asset light model.
Yeah.
Our SG&A in Q3 increased by one 6% year over year, and 15% Q over Q2, RMB $586 million, excluding DH SG&A for legacy Quad two was flattish on a year over year basis to RMB $435 million in which the <unk>.
Labor cost was roughly the same as last year.
The head count of our already trained during this time further efficiency improvement is on the way.
The 31% of Q over Q increase was due to the resumption of business in Shanghai headquarter visa fee the lockdown in Q2.
On the AG side overall, the selling expenses increased along with the business recovery and have generated higher efficiency as the salary expenses as a percentage of revenue actually declined by 2% from quarter because quarter.
Although other operating income in Q3, 'twenty to 2022 increased by 90% year over year to RMB 76 million, mainly due to more subsidy received from government for our China business side.
Yes.
Turning to page 21, our adjusted EBITDA was RMB $491 million in Q3, 2022, compared to RMB $385 million a year ago. The.
Th achieved better profitability in kitchen suite with EBITDA at RMB 94 million compared with a loss of RMB 116 million last year.
Holding DH legacy <unk> recorded a net adjusted EBITDA of RMB $397 million declined by 20% year over year, but significantly improved from RMB 23 million a quarter ago. The year over year decline was mainly due to the RMB $340 million.
Forex loss brought by the depreciation of Euro dollar versus our accounting currency USD, which largely is a noncash loss. If we exclude the forex loss that EBITDA would be over RMB 150 million higher than 2021.
In Q3 2022, we recorded adjusted net loss of RMB 375 million in large from the loss of RMB 46 million a year ago, and a loss of RMB 84 million a quarter ago.
Scooting DH legacy quadrant recorded adjusted net loss of $389 million in large from a loss of $39 million a quarter ago. The net loss was mainly due to forex loss as I mentioned previously and also the timing adjustment of effective tax to be paid in China.
Between the quarters.
Adjusted net profit of legacy DH turned positive for RMB 14 million for the first time.
Compared to the net loss of RMB 164 million a year ago.
Coming to the cash position.
Debt increased slightly to RMB 6 billion in Q3 from RMB $5 $65 7 billion is for this quarter was mainly due to some bank facilities with strong this quarter.
Cash balance improved to RMB, five 2 billion in the quarter from the RMB four 7 billion a quarter ago. The Unutilized Bank facility, a RMB two 9 billion given the COVID-19 impact to remain uncertain. We are very cautious on capex and opex spending to preserve cash.
In addition, we have successfully redeemed our convertible note with amount of U S. Dollar 475 million recently through both the combination of bank facilities and cash generated from operation.
Turning to page 24 on guidance.
Given lately there more resurgence of Covid happened in many provinces and cities.
Each word expect revenue to grow 7% to 11% in the fourth quarter of 2022 compared to the fourth quarter of 2021 or two declined 125% if excluding G. H.
Again.
Above guidance only reflect our current view, which is subject to change.
With that let's open for Q&A. Thanks.
Thank you.
We will now begin the question and answer session.
As a reminder to ask a question you need to press Star one one on your telephone please standby, while we compile the Q&A roster.
Our first question comes from the line of Dan Shaw from Morgan Stanley . Please ask your question Dan.
Hi, Good morning can you hear me.
Yes.
Okay.
Okay. What's your go to you and that's the way Washington militia leader that she sent that are loyal younger win T. A D. Go in peace acclaimed film called out now what do you think out a bigger one teaches young <unk>, so I'm going to apologize on God Sakes see do you like the woman chunk of Revpar, though Chico cheez it.
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Sorry, Please allow me to repeat my question in English. This is Ben from Morgan Stanley . My I have two questions. My first question is on legacy module.
China domestic business I would like to ask about the recent revpar trends for October we saw that there was some decline.
In Revpar due to a multi at any measure so October revpar was 74% of 2019.
I would like to ask about the trend in November and also for the fourth quarter revenue guidance.
Especially for legacy watch with what the management effect in terms of Revpar and also hotel opening expectation. Thank you.
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Yeah.
Okay.
Okay. So to answer your first question is given more sporadic a resurgence of COVID-19 happened in China in many cities and provinces and Oh, we are seeing more strict restriction carried out by the local governments again to mention the zero policy in China.
So we are not expecting the fourth quarter, our revpar recovery could be in orange off 70% to 75%.
For our China business in terms of the opening.
In the fourth quarter, given the recent COVID-19 impact the opening will be.
Somewhere affected as well.
However, if you ask about the gross opening.
On the revenue actually the fourth quarter, New opening has very limited impact on the revenue for the fourth quarter.
I'll, let you off the impacts will be from again, the revpar recovery, which is largely impacted by the recent COVID-19 resurgence. Thank you.
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My second question is about our overseas to each business so against the back drop off searching inflation in Europe , and can management share with us about more about the energy efficiency measures implemented.
Implemented by Beach, we saw dish operating expense actually declined 40% Q on Q Inc's third quarter, what is the trend in fourth quarter and should we expect further increased during the winter.
Thank you Dan for your question.
Hum.
The easiest of international businesses. Your question, it's quite a complicated so I try to affecting different in different areas.
Actually we are focusing on top line management.
We're focusing on revenue management really the drag to generate topline results and increased ADR, where possible, which is either in line with all the International Hotel management group.
Yeah.
Inflationary.
At the same time of course, we'll continue our operational improvement program, we already started this year, including and operational cost management, especially.
Actually you had quoted.
Efficiency improvement, which is at the hotel level.
Well as energy efficiency management next generation.
At the same time actually we are also conducting our portfolio review as well as how can we need to perform this type of asset.
Energy efficiency management and hotel level are very granular and very operational for example, you did not turn on the alcohol when it's not when it's not necessary, but turned down to heat heat wave. It is you know two one and you can turn off the light.
When there's nobody in them. So we really try to them to penetrate all the operations day to day operation to cut down our cost Oh energy cost at the same time. We are also negotiating with NTT and supply company, where we can take them.
And we will fix them and where we see a path a possibility to go to work we've got a flexible pricing we won't do that basically we are working in a short term fix price I think in the mid to long term more flexible pricing.
Just to assure you that we are really working very closely with energy supply company, but many jobs.
Some of these effects.
<unk> reported this quarter actually you shouldn't be able to continue to preserve them in the fourth quarter and next year as well, especially as some of the efficiency improvement program and the overhead cost reduction and full year result will only start to show up at one time or kind of Iraq.
Write off.
I hope that addresses your question.
That's very clear thank you Michelle.
Alright. Thank you for your question.
Our next question comes from the line of Ronald Leung from Bank of America. Please.
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Can you hear me.
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Tien Tsin, Huang say something like that Oh. Please allow me to ask the question in English so over the past few months there was no COVID-19 outbreak across various cities and provinces in China.
Do you see that.
For the magnitude of the impact the franchisee sentiment and if possible could you shed their monthly hotel sign ups over the past few months. Thank you very much.
Yeah.
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Okay. So.
So yes to address your question. So basically we agree that the current restructuring due to COVID-19 has continuously affected our franchisees confidence sentiment.
So in terms of the new signings, we are seeing there isn't new signings, Inc. Third quarter and fourth quarter are roughly at 80% compared to a normal period.
However, you know we are we look at that things in different ways, because China is big So we are seeing that's quite a different development fronts.
You are divided the country into tier one tier two cities and the lower tier cities. In fact, we are seeing that in the lower tier cities actually the coffee those documents in part and cooperating Cup a much smaller compared to those tier one to tier two city because more resurgence of COVID-19 happened.
And in those tier one tier two cities. So that's why the coffee that's lovely coffee dose level for the franchisees in lower tier cities are.
Really to sleep better contracts with those in the tier one and tier two cities.
And I think if you are talking about the full recovery. So we asked you need to wait until the further east of the Covid restructure and the improvement of the economic condition in the upcoming futures.
However for us in terms of our strategy, we will not are not because of the weak market conditions or low coffee dose level, we will insist on implementing our strategy in terms of the lower tier cities penetration as well as you know further penetrating or increase our market share.
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I asked my question in English so the southeast market in China is one of the regional market that.
The company has put great emphasis on so could you share the latest developments in the southeast market and if possible could you share the mid to long term development target.
Southwest market of China. Thank you very much.
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Okay. Thank you for your questions. So in terms of the southern part of China.
It is one of the most important regions that we are going to further penetrate in order to achieve this so we have been making a lot of preparations over the last a year. So the most important things that we did a very significant organizational restructuring and we moved to Intel organized.
You should know dunk too with the the regions as far as move a lot of you know the the management Middle management team from the Shanghai headquarter is true to the local market at sometimes we are also building up a local license based talent pools and trying to make Ah.
For example, the localized marketing strategy localized looked a localized supply chain management to meet the customer demand in that particular market because those customers demand somewhere a difference compared to what we have they seen in eastern part of China like some hearts.
In terms of the long term targets again similar to our other reaches a we are just we are targeting 20% of the market share in southern part of China as well are actually we are we have been opening several flagship stores in our core cities in southern part of China like Center in Guangzhou.
By using our hunting G hotel as well as Orange on the Crystal Orange, a true true true true true provide some of the showcased in that market. So we are hoping that the next three to five years, we will be achieving a very good development in that particular region. Thank you.
Thank you Jason on that it seems like you'll have to see.
Alright. Thank you for your question.
Next question comes from the line of Simon Jones from Goldman Sachs. Please ask your question Simon.
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Okay. Thank you, yes for the eighth year on actually it has benefited from both external and internal factors a four hour internal factors. There's just structurally aligned with our original management that we have been doing over the last few months, yes, so internally we have being yeah.
Using our pricing synergy Brexit energy in the original synergy to create a better ADR to assure that for longer term, a healthier and sustainable growth and then it becomes a very important part of the long term revenue management.
Just one for the external factors. Yeah. This is due to several factors like higher inflation as well as the impact of the.
Continuous closure of the independent hotels that also from external size to provide some of the room for our further improving the age you are seeing the longer term. Thank you.
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The next question is in relation to the the brand strategies.
And also in the presentation deck.
Now you have three brands, where you have more than 500 stores.
Including hunting Qi hotel and an orange.
Wondering whether the company would wander too concentrated.
Those three brands on several key brands or just like all the competitors that you're going to be diversified and expanded into a lot more different Brett. Thank you.
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Yes to answer your questions in terms of our brand strategy and our key theme behind this is stuff in each of the supplement we were trying to build up the <unk>.
Number one number two brands in the market. So in terms of our economics documents, we have been successfully establish a very strong brand, which is hunting and we are also establishing a now on an ehealth grants for specifically for the lower tier cities penetration and in terms of the middle skills settlement Oh Gee.
Hill has been very famous.
They most of them are popular in the market and leading a top brands in the middle scale segment, and we are seeing a pretty good progress on the development of Orange Hotel.
We hope that it's gonna be creating another one in that particular segment. So basically for each of the supplement we want to have one or two brands, which is on the top at least of the.
Brent.
And which can create a very popular brands that our customers are alike and make helps our franchisees to make money. Thank you.
Okay.
Thank you.
Great. Thank you very much for all your questions. We have now reached the end of the question and answer session. I'll now turn the conference back to the management team for closing remarks.
Thank you everyone for taking your time with US today, and we look forward to see you in upcoming quarter. Thank you bye bye.
Thank you. This concludes today's conference call. Thank you for participating you may now disconnect.
Okay.
Yeah.
Yeah.
The conference will begin shortly.
As Johan during Q&A, you can dial star one one.
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